Diligent financial planning and portfolio management are critical in today's economy. The volatility of today's economy now demands a high degree of discipline and attention to one's investments for college, retirement and other long term goals. Conventionally, in managing an investment portfolio, the key decisions revolve around how to allocate portfolio assets among different asset classes such as stocks, bonds and cash. Generally, asset allocation is easier to manage with respect to investing for more long term investments such as college savings and retirement. Typically, investment strategies for these long term investments take into account factors such as fluctuations in the investor's income over time, market volatility, the possibility of outliving one's assets, and inflation risk.
By way of background, a conventional response to the problem of setting long term investment strategies has been to follow a so-called “glide path”, which is a year-by-year process of adjusting a portfolio's asset allocation according to the investor's age. The typical glide path shifts the portfolio toward conservative, fixed-income assets and away from riskier, equity-like assets as the investor grows older. Additionally, there are numerous investment funds known as “target funds” or “target date funds” that may perform this reallocation automatically over time.
However, these conventional investment planning strategies such as the glide path fail to take into account more short term spending and saving transactions on an individual level. Furthermore, conventional investment and portfolio management methodologies do not provide the ability to plan down to the monthly, weekly and even daily level. For example, more micro-level or short term financial expenditures such as eating out, gas, retail purchases, etc. are not accounted for in conventional financial planning and investment management. Generally, more conventional long term based investment planning cannot account for such purchases made since they focus more on macro level financial transactions and time frames.
Accordingly, it would be desirable to have a system that can accurately track both short term and long term financial transactions and goals in a manageable and accurate manner. It would be further desirable to have a system that could also provide intelligent recommendations and related portfolio re-allocation to achieve one's financial goals and priorities in a real time basis.